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September 24, 2015

DiCaprio Refuses To Respond to Divestment Questions

“[He] smiled and waved but kept mum.”

Confronted with questions from a MSNBC reporter at a press conference on Tuesday about his pledge to divest from fossil fuels, Hollywood actor Leonardo DiCaprio “smiled and waved but kept mum.”

DiCaprio was the headliner for a rollout of a new report from the pro-divestment group Arabella Advisors. The report claims that the “movement to divest from fossil fuels and invest in renewable energy and climate solutions has exploded, growing 50-fold in just one year and topping $2.6 trillion.”

Of course, this number is “pure fiction” as Divestment Facts reported yesterday. The figure in no way represents the amount that is being divested from fossil fuels or the amount that is being reinvested in non-fossil energy.  It is simply an aggregation of the total value of the combined assets of each entity that divestment activists claim has pledged to divest at least something, at some point. The actual energy-related holdings of each of these entities may in fact be a very small fraction of these totals, as we see often by institutions claiming they are divesting. In fact, “the investment consultancy behind today’s report has no idea how much money the institutions surveyed have invested in fossil fuels,” reported Mother Jones.

Thankfully, even a few media outlets with a reputation of being ideologically aligned with divestment advocates couldn’t let the absurdity of these claims pass without comment. To wit:

Mother Jones:

“Pulling that kind of cash out of the fossil fuel juggernaut could land a true financial blow, a clear victory in the global war to stop climate change. But there’s a catch. That big number—$2.6 trillion—has nothing to do with the amount of money that is actually being pulled out of fossil fuel stocks. In fact, the investment consultancy behind today’s report has no idea how much money the institutions surveyed have invested in fossil fuels, and thus how much they have pledged to divest. Instead, that number refers to the total size of all the assets held by those institutions—hence the word “representing” in the quote above from the report. And that’s a huge difference.” (emphasis added)

MSNBC also reported on questions the activists came up short on:

“But despite the big numbers and bold names—including the support of a Rockefeller heir—the fossil fuel divestment movement still faces big questions about its efficacy. The organizers, which include 350.org and the philanthropy Divest-Invest, admit that they’ve got few substantial answers themselves. They don’t know how much of that $2.6 trillion was actually invested in fossil fuels in the first place. They can’t say for certain that the hundreds of organizations and individuals ‘committed’ to divest have actually done so. Even if all that money was pulled from the market, there’s no evidence that it’s made any difference – or will make any difference—at least not in the share prices of fossil fuel companies.”

The numbers were actually so ridiculous that divestment supporters were forced to answer questions about whether their report was “misleading.” Back to Mother Jones:

“In an interview following the announcement, May Boeve, director of the activist group 350.org, defended the framing of the announcement, saying she doesn’t ‘think it’s misleading.’ ‘The purpose of divestment is to make the point that the [fossil fuel] industry is losing legitimacy,” she said. “It’s about their reputation, which is less quantifiable but equally damaging.’”

In fact, as Mother Jones noted and which was highlighted on this blog yesterday, Arabella counts the University of California system as a divested entity, even though the school’s chief investment officer explicitly rejected that idea in an op-ed he placed last week. True enough, Cal did recently sell some of its assets in the coal and oil sands sector (whatever that is), and, according to Mother Jones, “those holdings were worth about $200 million. An undisclosed amount is still invested in oil and gas. But the report uses the full amount of the university’s total endowment: $98 billion. That’s 490 times higher than the amount of money actually being divested.”

Unfortunately for 350.org, which had every reason to expect that no one would really do THAT much digging into methodology behind the report, this time they ended up getting caught. When even Mother Jones reports that “[t]he fossil fuel divestment campaign isn’t as big as some environmentalists want you to think,” you know you have a bit of a credibility problem. As Mother Jones concludes, “Expect to see more announcements like this over the next few weeks in advance of the upcoming UN climate talks in Paris. Just make sure to read the fine print.”